How rich Russians earn on the poor: the secrets of bank deposits

— How big are the contributions of the Russians now?

— As of July 1, 2023, funds of individuals in Russian banks, excluding balances on escrow accounts (the so-called special accounts that are used for safe transactions in the real estate market under construction – “MK”) reached the amount of 39.3 trillion rubles, while the amount of retail loans amounted to 30 trillion rubles. It turns out that the Russians are a “net creditor” of the banking sector: the funds placed by them in banks exceed the total debt of citizens by 9.3 trillion rubles. Looking at these statistics, we can draw a blissful conclusion that, despite the difficult times, our compatriots remain committed to a savings rather than a consumer behavior model: they save more than they spend.

– Judging by your tone, is there a catch in this blissful conclusion?

– Undoubtedly. After all, if you look at the statistics, taking into account the property stratification of the population, it turns out that poor Russians are indebted “through the roof”, and they have little or no deposits. Whereas the rich, on the contrary, have deposits “above the roof.” As a result, the rich earn interest by lending to the poor through banks.

– Periodically, this comes up in sociological studies.

– Indeed, for example, according to a survey conducted by the Superjob service in October 2022, almost every second Russian (47%) does not have any savings. Last year, only 40% of Russians have savings, according to a study by Anderida Financial Group.

– The rest of the income, most likely, does not allow you to save money. Is this the main reason for the lack of deposits from more than half of our compatriots?

– The reason for the lack of savings among the poor is not only in low income, but also in the low level of financial culture. A well-known phenomenon: the poor often buy expensive things that they obviously cannot afford: iPhones, “branded” clothes and jewelry, other luxury goods, and, as a rule, at the expense of loans.

Let’s talk about those who make deposits. Is there any visible separation?

– The structure of deposits of the population is similar to a pyramid. At the lower level – about 600 million accounts with balances of less than 100 thousand rubles. It should be noted here that one person can have several deposits in different banks, but this does not change the overall picture. And at the top of the pyramid there are only 86 thousand accounts with balances of more than 20 million rubles. Moreover, the amount of deposits at the lower level of the pyramid is only 7.2% of the sum of all deposits, while at the top of the pyramid it is 20% of the sum of all deposits.

It turns out that only 0.01% of the accounts of individuals are concentrated 20% of deposits: we are talking about the accounts of citizens with more than 20 million rubles. And only 1.2% of the accounts of compatriots account for 58.2% of deposits: there are accounts of individuals with more than 1 million rubles.

– It turns out that the amount of deposits from wealthy Russians is measured in tens of millions?

– According to the Central Bank of the Russian Federation, as of July 1, 2023, 85.7 thousand accounts of individuals with an amount of funds of more than 20 million rubles were recorded in Russian banks. The average deposit of these citizens amounted to 95.5 million rubles. For comparison, as of January 1, 2022, 78.3 thousand accounts of individuals with more than 20 million rubles were registered in Russian banks. The average deposit of these citizens amounted to 95.3 million rubles. The statistics on deposits correspond to estimates of the number of Russians-highnets (from the English abbreviation HNWI – High-net-worth individuals, that is, the “richest” people – this is the name of citizens whose combined wealth, excluding basic housing and everyday goods, is at least a million dollars – “MK”). According to a study by the international consulting company Capgemini, at the end of 2019 there were 215,000 highnet Russians.

– It turns out that over the past year the number of rich depositors has grown, and their money has increased. Did the sanctions help them get rich?

– The active growth in the number of accounts with funds over 20 million rubles may be associated with sanctions and is due to both the repatriation of the capital of Russians and the difficulty of withdrawing funds abroad.

— And how many deposits do super-rich Russians have?

— The above statistics allow us to estimate, using econometrics, the number of accounts with more than 1 billion rubles in funds: there are about 5,000 such deposits.

– Your calculations show that over the past year, despite the sanctions and the fall in our country’s GDP, the Haynets have become even richer.

— Not only them. The largest increase in the number of accounts of individuals over a year and a half occurred in the category from 1.4 million to 3 million rubles. Their number increased by 25.7% or by 560.2 thousand accounts – up to 2.7 million accounts as of July 1, 2023. It should be recalled that 1.4 million rubles is the maximum amount of insurance compensation for deposits in Russia, with the exception of cases of “special life circumstances”, where the maximum amount of compensation is 10 million rubles.

— After raising the key rate, the profitability of deposits increased. The regulator completely canceled the restriction on the full cost of consumer loans before the end of the year, which will lead to a natural increase in rates. What other consequences can be expected from the measures taken by the Bank of Russia?

— A sharp rise in the value of money will cool the market. The rapid growth of unsecured consumer credit and subsidized mortgages led to an increase in the debt load of low-income Russians. Both the unsecured consumer loan market and the soft mortgage market are rapidly inflating bubbles, which is especially dangerous in an unstable and stagnant economy. A sharp rise in interest rates will reduce the demand for loans. We can expect a slowdown in the rate of mortgage growth and, as a result, a reduction in demand for housing and a decrease in property prices.

Last year, immediately after a sharp increase in the key rate from 9.5% to 20%, the preferential mortgage rate was increased from 7% to 12%. It is possible that after the current significant increase in the key rate, the preferential mortgage rate will be raised from the current level of 8%, which contrasts sharply with the key rate of 12%.

The current measure of the Central Bank, although it has stabilized the financial market in the short term, is unlikely to stabilize the situation even in the medium term. Raising the key rate is like treating covid with aspirin. Some symptoms can be alleviated, but nothing more.

— Rising rates will lead to higher savings. What other processes are taking place in the deposit market?

— An important trend in the deposit market is their devaluation in Russian banks, primarily in the form of an outflow of foreign currency deposits abroad. It is clear that it is predominantly wealthy depositors who withdraw foreign currency savings abroad. There is a trend of de-dollarization and de-euroization, and, at the same time, yuanization of deposits.

Is it worth expecting a decrease in the number of poor Russians who do not have savings?

– The number of poor Russians who have no savings and have debts is estimated differently. According to the minimum official estimate, these are those who live below the poverty line. After the revision of data by Rosstat, the share of poor citizens in Russia has updated its historical low, falling below 10% for the first time in 2022. The previous estimate was 10.5%. According to new data from the statistical service, 14.3 million Russians, or 9.8% of the population, were below the poverty line last year. It is clear that if we carefully review the data once again, this share can be reduced by a factor of two. But such recalculations are unlikely to bring fried chicken to the table of these Russians.